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LATEST NEWS UPDATES | Mayawati sucks happiness of sugar mills to give one sweet deal to 3.5 million sugarcane farmers in UP by Man Mohan Rai

Mayawati sucks happiness of sugar mills to give one sweet deal to 3.5 million sugarcane farmers in UP by Man Mohan Rai

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published Published on Feb 22, 2012   modified Modified on Feb 22, 2012

Passing by dense sugarcane and mustard fields, and potholed tracks on the outskirts of rural Lakhimpur Kheri, one reaches the large residential enclave of Mithun Kumar on the Uttar Pradesh-Nepal border.
Sugar cane 1
Introductions done, the 52-year-old proudly informs he has just booked a 2,000 sq ft plot in the upcoming Omaxe City township in Lucknow. "It will also have a club house and a mini golf-course once fully developed," he adds.
Sugar cane 2
As farmers in UP go, Kumar is well off, and has become even better off in the past two years. This year, he sold cane worth Rs 6 lakh and expects to add another Rs 2 lakh when he clears his fields by end-March. Last year, he sold cane worth Rs 6 lakh.

It's not a bumper crop, but it's a bumper realisation. For the fourth straight year, the Mayawati-led UP government has effected a chunky increase in the price sugar mills in the state have to pay farmers for cane. This year, the increase in the state advised price (SAP) of the normal variety of cane is 17%, taking the increase under Mayawati's tenure to 92%.

Put another way, farmer incomes would have doubled for the same level of cane produced. By comparison, in the preceding five years, when Mulayam Singh Yadav, her bete noire, was the chief minister, the increase in cane prices was 32%.

In UP, when it comes to political capital, cane follows only caste, and Mayawati has the numbers on her side. sugar is the largest industry in UP and, according to Mukesh Gautam, director agriculture, UP, cane accounts for 14% of the area under cultivation in the state.

Mayawati has given one sweet deal to 3.5 million farmers, mostly sucking, in the process, the happiness of about 125 sugar mills. If the core of Mulayam's sugar policy was to incentivise mills to expand capacity, Mayawati tore into them - in the fields, at the policy table and in the courts. Her administration reversed Mulayam's sugar policy, that too with retrospective effect, and slapped cases against prominent mill owners for allegedly giving an unfair deal to farmers.

Instead, her singular focus has been the farmer, who has benefited from not only higher cane prices, but also from speedier payments and a growing clout.

Mayawati has set new standards on cane prices. Not only are cane prices irreversible - no government will dare cut them - the other political parties are posturing to cut an even sweeter deal to farmers. For example, the BJP, whose election manifesto devotes almost two pages to cane, says it will increase the SAP by 25% to Rs 300 per quintal next year.

The Congress and Samajwadi Party, in their respective manifestos, too assure policy changes to yield similar outcomes. "Cane SAP has become a political tool for most parties," says Abinash Verma, general secretary, Indian Sugar Mills Association, the main grouping of sugar mills. "It is not just about this year or any government in particular."

In a February 8 letter to the Centre and UP government demanding a relief package, ISMA estimated that sugar mills in UP will lose Rs 3,750 crore this year. It complains that companies have exhausted their working capital and banks have stopped lending. The Mayawati administration's typical response to such missives has been to look the other way.

The Economic Times, 21 February, 2012, http://articles.economictimes.indiatimes.com/2012-02-21/news/31083041_1_cane-prices-sugar-policy-abinash-verma


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